During auditing class, Janine asks her auditing professor why companies need audits in the first place, as she doesn't understand why they would expend resources on this. Which of the following responses by the professor would be most appropriate? O Firms, especially publicly-traded firms, need audits because they are required to be audited by the Financial Accounting Standards Board. O Audits lend assurance to the client's financial statements and disclosures and help them raise money in the debt and equity markets. O Audits help companies increase investor confidence in their firm. When investor confidence is higher, firms can usually negotiate lower dividends. O None of these answer choices are correct.

During auditing class, Janine asks her auditing professor why companies need audits in the first place, as she doesn't understand wh they would expend resources on this. Which of the following responses by the professor would be most appropriate? Firms, especially publicly-traded firms, need audits because they are required to be audited by the Financial Accounting Standards Board. Audits lend assurance to the client's financial statements and disclosures and help them raise money in the debt and equity markets. Audits help companies increase investor confidence in their firm. When investor confidence is higher, firms can usually negotiate lower dividends. None of these answer choices are correct